Saudi Arabia’s Singapore plan: How Riyadh aims to protect Asian oil supplies from 2027

The kingdom has planned to store crude oil at Singapore's Jurong Rock Caverns after oil supplies to Asia were severely choked in the Strait of Hormuz due to the US-Iran war (Photo: Reuters).Saudi Arabia plans to store crude oil in Singapore from the second half of 2027, energy ministers from both countries announced on Monday, as a move to bolster energy supply security in the region.The kingdom has planned to store crude oil at Singapore's Jurong Rock Caverns after oil supplies to Asia were severely choked in the Strait of Hormuz due to the US-Iran war. Before the war, nearly two-thirds of Asia's imported oil came from the Middle East, Reuters reported."Saudi Arabia and Singapore are announcing our joint intent to establish an arrangement for Saudi crude oil to be stored at the Jurong Rock Caverns from the second half of 2027," Singapore's energy, trade and industry minister Tan See Leng said at the Singapore International Energy Week conference.Tan said the arrangement would strengthen the resilience of Saudi Arabia's crude oil supply chain in Southeast Asia while enhancing Singapore's energy security and preparedness for supply disruptions. He further announced that Saudi Aramco would sign a memorandum of understanding with Singapore's Energy Market Authority and JTC Corp on Monday, with negotiations expected to conclude within a few months.Saudi energy minister Prince Abdulaziz bin Salman Al-Saud said the arrangement would bring supplies closer to key Asian markets."Bringing supply closer to key Asian markets would strengthen the flexibility of our supply network and support Singapore's security of supply and preparedness," he said in a video recording at the conference.Saudi Aramco already stores crude oil in Japan and South Korea, where local governments have priority access to the supplies in the event of an unexpected shortage.In Japan, storage capacity in Okinawa was expanded to 8.2 million barrels in September 2017 under an agreement with Japan Oil, Gas and Metals National Corp (JOGMEC), according to Aramco Japan's website, Reuters reported.Located 150 metres below ground on Jurong Island, Singapore's rock caverns can hold up to 1.47 million cubic metres of liquid hydrocarbons, including crude oil and condensate.